Is the supply of detached homes, under $200,000. on the Halifax Peninsula really changing?

Is the supply of detached homes, under $200,000. on the Halifax Peninsula really changing?

For anyone considering a move to Halifax and wanting the conveniences of short easy walking, biking or a quick bus ride to downtown Halifax, the first place they usually look is ‘The Peninsula’. Divided into 4 areas; south, west, central and north, most areas offer the urban walk-able living lifestyle with close proximity to shopping, cafe’s, restaurants, theaters, Churches, green spaces, parks and community gathering places.  And, of course, surrounded by the ocean with the Halifax Harbor on one side and the Northwest Arm on the other. Next comes the question of affordability…

Generally speaking, since 2012, less than 1% of detached homes sold on MLS® on the peninsula were under $200,000. and an average of 3% of detached homes sold on MLS® on the peninsula were over $1 million dollars.

On the entry level end, since 2012, excluding condo’s, the actual percentage and number of detached homes MLS® sold under $200,000 hasn’t really changed (except for 2016-2017) but what these numbers don’t show is the size of the homes sold. Each year the listings under $200000. tend to be smaller and typically are bungalows.;

2012-2013 .6% of total Halifax Peninsula Sales (4 homes)

2013-2014 .7% (4 homes)

2014-2015 .7% (4 homes)

2015-2016 .8% (5 homes)

2016-2017 1.6% (11 homes)

2017 (Jan-Sept) .6% (3 homes)

On the high end, since 2012, the MLS® sales of properties over $1 million dollar has generally been increasing.

2012-2013 2.4% of total Halifax Peninsula Sales

2013-2014 2%

2014-2015 2.9%

2015-2016 3.8%

2016-2017 4.9%

2017 (Jan-Sept) 3.6%

So what does this mean? My professional opinion is to buy anything detached under $200000. (excluding main thoroughfares) on the peninsula to maximize your real estate investment – especially if you are a first time home buyer!  Compromise on space, forgo costly renovations (except paint and utilities) and hold until the increase in the market pays for your utility upgrades and doubles your down-payment to buy your next home. It may happen faster than you think! Logic and historical real estate patterns says that any real estate that offers time saving easy lifestyle living will become more valuable as our demographics shift and our needs and demands re-prioritize. Consider how in 2000 approximately 40% of all MLS® sales of detached properties on the Peninsula were under $200,000. compared to less than 4% so far this year. According to NSAR and CREA our HRM (Halifax Regional Municipality) overall prices have increased 4.2% in the last year.  It also lists our average price at $297,700. but that is based on MLS® sales of properties covering all of HRM which is a very large area. (approximately 1 hour by car from one end to the other).

http://creastats.crea.ca/nsar/

Ready to buy? Call me anytime. ‘Let’s Talk Real Estate!’

~ Michele Vyge-Fraser (902) 830-6397

Red Door Realty Agent/Associate Broker with over 20 years experience

 

Fall 2014 – Halifax Real Estate Market – Are Prices Really Falling?

Oct. 20, 2014

A quick snapshot of MLS® across HRM (Halifax Regional Municipality) residential sales in the last 30 days as compared to the last 3 years, 2005 and 2001 suggests that average prices have fallen just over 1% in the last year;

2014 – Sold 343 – average list price $266,813.41 average sold price $255.835.06 – list to sale ratio 95.9%

2013 – Sold 355 – average list price $269,108.25 average sold price $258,847.39 – list to sale ratio 96.2%

2012 – Sold 433 – average list price $252,334.13 average sold price $245,433.97 – list to sale ratio 97.3%

2008 – Sold 408 – average list price $221,522.42 average sold price $215,925.09 – list to sale ratio 97.47%

2005 – Sold 470 – average list price $187,758.94 average sold price $181,318.50 – list to sale ratio 96.6%

2001 – Sold 490 – average list price $129,376.69 average sold price $125,130.59 – list to sale ratio 96.7%

Considering the speculative spike in prices and new housing sales from 2012-2013, this adjustment on primarily re-sale properties was inevitable. The question is, ‘is our market moving up again?’

A comparison of Halifax median household incomes from Statistics Canada says that before tax dollars has risen an average of 2.06% each year from 2008-2012. More importantly, using a factor of 3x household income and the 2012 Halifax median household income of $80490. suggests a safe affordability of $241380 in 2012. Average prices were almost 2% higher. That may not sound like a lot but given our Maritime cautious progressive growth culture, market price sensitivity and other factors, it was enough to tip the market scales in favor of buyers in 2014.

Assuming similar median household income increases from 2012-2016 the safe affordability average price in HRM should increase to $267387.42 in 2016. Still lower than the average selling price 2013 yet based on the current average selling price, if average prices increase 2% per year for the next couple of years, the average price could be $266170.80. Some experts suggest that real estate markets become severely unaffordable when average real estate prices exceed 5x household incomes. Others suggest that the affordability factor should now be 5% to reflect the low interest rates and reductions in household debt.

What determines market conditions? In its simplest form a buyer’s market happens when there are more listings than sales, a seller’s market happens when there are too few good listings to satisfy buyer demand and a balanced market happens when both sides are more or less equally satisfied. Until recently, our local challenge has been a buyer’s market with too many seller’s holding at list prices that are too high. Their rational? In quite a few cases seller’s want to recoup both their original investment and 100%+ of their expensive renovation costs. The reality is, unless we are in a seller’s market, approximately 50% of renovation costs is a more realistic expectation if completed within the last 3 years on homes purchased in the last 7 years – unless the renovations are utility items i.e. windows, roof, wiring, plumbing in which case 100% payback is acceptable by most buyer’s.

Earlier this year I attended a CMHC market review session and challenged the accuracy of list to sale ratios being presented to the public. My question was ‘are these calculated numbers telling the whole story including the original list price?’ The response was ‘the original list price is not the marker, it is the list price that ultimately attracts the winning offer – even if reduced – that most accurately reflects the list to sale ratio’. And that ‘days on market’ are also presented to the public which should help everyone understand the tenacity and conditions of the market.  Agreed. However… I continue to maintain that for the sake of simple accuracy and headlines, list to sale ratios should reflect original list prices to be true to reflecting market conditions. That this is significant information on many levels but most importantly they guide confidence levels and decisions of real estate clients and they feed into government considerations regarding interest rates. As my clients know, as an agent I review the list price history of the subject and comparable properties as part of determining market value and guiding our negotiations strategy. High list to sale price ratios suggest a changing market in favor of seller’s.

Next article… a comparison of annual list to sell ratio’s. In the meantime, with so many listings still on the market there are some exceptional ‘deals’ out there. Please call me anytime to move on your real estate goals.

~ Michele Vyge-Fraser (Red Door Real Estate Agent/Associate Broker) (902) 830-6397

Halifax Real Estate – Nova Scotia

2011 Local Real Estate Market off to Good Start….

March 7, 2011

March school break usually marks the transition into our Spring market. This year is different. The February timing of the Canada Games held in Halifax this year has focused ‘Spring Market Enthusiasm’ early. Open house activity, new listings and sales are picking up pace. Mortgage rates are also supporting the confidence. Most Halifax and HRM prices are still very affordable by national standards. And though the average national consumer debt has recently been reported as being at an all time high, demographic shifting is fuelling the market… especially amongst baby boomers and first time home buyers. Some properties are being sold to cash in & enjoy the benefits of lifelong retirement planning and investments, others to consolidate debt, move up or downsize. Rents are also changing and in many cases climbing with the recent change in Nova Scotia tenancy laws granting immediate tenure. More incentive to own versus rent…

Best Regards, Michele… Halifax Real Estate Agent/Associate Broker
www.michelevygefraser.com

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